Written by Christy Hinko Friday, 22 April 2011 00:00
Senator Charles Fuschillo, Jr. and seven other state senators held a public hearing on Thursday, April 7 at Farmingdale State College to explore ways to improve oversight of LIPA and ensure that the energy provider is accountable to ratepayers across Long Island.
Senator Fuschillo and Senator George Maziarz (R-Newfane), Chairman of the Senate’s Energy & Telecommunications Committee, were joined at the hearing by Senator Owen Johnson (R-Babylon), Senator Ken LaValle (R-Port Jefferson), Senator Carl Marcellino (R-Syosset), Senator John Flanagan (R-Northport), Senator Jack Martins (R-Mineola), and Senator Lee Zeldin (R-Shirley).
The panel of Senators questioned and heard testimony from LIPA Chief Operating Officer Michael Hervey including LIPA’s handling of its recent $367 million in ratepayer overcharges; LIPA’s financial practices.
In addition to the discussion was the Senate bill S2581 requiring the state’s Public Service Commission to approve any LIPA rate increases over 2.5 percent; and what measures are needed to improve LIPA’s accountability to its ratepayers.
“LIPA has raised its rates seven times since 2001. If LIPA wants to raise its rates more than 2.5 percent within a year’s time, they should have to explain the reason. The end result will be a greater oversight, which will benefit our residents and business owners,” said Senator Jack Martins.
Senator Fuschillo scheduled the hearing following LIPA’s announcement in February of this year that it overcharged its ratepayers by $231 million for “lost-power,” through an error of using an outdated formula to calculate costs.
“Long Islanders pay among the highest utility rates in the country,” Senator Ken LaValle said. “Accountability and transparency are critically important to protect ratepayers.”
Ratepayers will receive only a partial refund through an incremental rate cut paid over a three-year period beginning this month. Subsequently, LIPA announced a separate $136 million overcharge for fuel costs, adding up to a combined $367 million in unnecessary charges to ratepayers.
The reason for the public hearing, “We need answers from LIPA, we need to know what LIPA is doing with our ratepayers’ dollars,” said Senator Fuschillo, a member of the Senate’s Energy & Telecommunications Committee. “LIPA’s recent overcharges have added $367 million in unnecessary costs to ratepayers who are already paying some of the highest utility costs in the country. LIPA needs to do a better job in managing ratepayer dollars and being accountable to its customers. This hearing examined what steps need to be taken to ensure that happens.”
In addition, a number of other experts offered testimony and answered questions, including: Garry Brown, chairman of the New York State Public Service Commission; Dr. Matthew Cordaro, an expert in the field of energy utilities; Dr. Martin Cantor, CPA, Director Long Island Economic & Social, Policy Institute at Dowling College; Suffolk County Legislator Wayne Horsely, chairman of the Legislature’s Economic Development, Higher Education, and Energy Committee; Robert Shand, business agent, IBEW 1049; Rose Van Guilder, president, Alliance for Independent Long Island; and Sheldon Sackstein, chairman, Action Long Island. A representative from the New York State Comptroller’s Office also offered testimony at the hearing.